The Joint Center for Housing Studies of Harvard University just published a report on the status of the nations housing for 2009. We wanted to share a chart published at the end of the report outlining cycles that housing prices have undergone since 1977, and there are some clear trends.
(The following chart can be printed by hitting the PRINTER icon at the top of the PDF frame below. Or you can adjust the percentage for a larger view of any particular portion.)
Starting on the left side of the page...... The circled years indicate the years when appreciation turned to depreciation, and then cycled back into a rise. These cycles typically run in 5 year stints Of particular interest is the cycle between 1993 and 2006....the market continued to rise and rise and rise.
We now turn our attention to the far right side of the chart....the numbers circled indicate PEAK home prices for any given period of years. Note that prices go through a cycle and hit a peak approximately every 10 years, i.e. it takes approximately 10 years to return to any given peak pricing period.
Using this logic, we might predict (if at all possible) that it will take until 2015 o 2016 before our prices return to where they were at the peak in 2006. While there are many other indicators that might determine where pricing is going such as interest rates, distressed properties, programs to spur buying, etc. we are certain that our market remains relatively flat in the pricing arena and appreciation is not expected for a number of years moving forward.
Of course none of us has a crystal ball, and so this report is of particular interest. You can view the entire JOINT CENTER FOR HOUSING STURDIES AT HARVARD UNIVERSITY report.
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